First Quarter 2024 Highlights:

• Net income of $12.3 million, $0.45 per diluted share (excluding merger costs, $14.6 million, $0.53 per diluted share, see the “Non-GAAP Financial Measures and Reconciliations” below)
• Net interest margin of 3.99%
• Return on average total assets of 0.64% (excluding merger costs, 0.76%, see the “Non-GAAP Financial Measures and Reconciliations” below)
• Return on average stockholders’ equity of 5.15% (excluding merger costs, 6.11%, see the “Non-GAAP Financial Measures and Reconciliations” below)
• Loan growth of 1.1% annualized
• Deposit growth of 4.5% annualized
• 24.4% noninterest income to total revenue¹

FirstSun Capital Bancorp (“FirstSun”) (OTCQX: FSUN) reported net income of $12.3 million for the first quarter of 2024 compared to net income of $26.3 million for the first quarter of 2023. Earnings per diluted share were $0.45 for the first quarter of 2024 compared to $1.03 for the first quarter of 2023. Earnings for the first quarter of 2024 were negatively impacted by $2.3 million of merger costs, net of tax, or $0.08 per diluted share and a $13.1 million loan charge-off, net of tax, or $0.47 per diluted share.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “Our core business remains strong in this difficult banking environment and while we experienced a decline in our results this quarter due to an individual and isolated loan charge-off, we are pleased to have the flexibility to continue to expand our franchise in important markets. Our net interest margin remains very strong at 3.99% this quarter and our overall earnings continue to be favorably impacted by our well diversified business mix, including the balanced level of noninterest income to total revenue at 24.4%.

“We are also pleased to announce that we have onboarded a new C&I banking team in Southern California. We are very excited about the opportunity to grow our clients and business relationships with the entry into the key markets of Southern California. The experience and the relationships of this new C&I team provide for significant expansion of all our lines of business in this large and diverse region.”

First Quarter 2024 Results

Net income totaled $12.3 million, or $0.45 per diluted share, during the first quarter of 2024, compared to $24.0 million, or $0.94 per diluted share, during the prior quarter. Net income in the first quarter of 2024 included $2.3 million in merger costs, net of tax. The return on average total assets was 0.64% in the first quarter of 2024, compared to 1.26% in the prior quarter, and the return on average stockholders’ equity was 5.15% in the first quarter of 2024, compared to 11.19% in the prior quarter. First quarter 2024 merger costs negatively affected return on average total assets by 0.12% and return on average stockholders’ equity by 0.96%.

As previously announced, concurrent with the entry into the merger agreement with HomeStreet, Inc. (“HomeStreet”) on January 16, 2024, we entered into an upfront securities purchase agreement with certain funds managed by Wellington Management Company, LLP, pursuant to which we issued 2,461,538 shares of our common stock in a private placement for $80.0 million that closed on January 17, 2024.

Net Interest Income and Net Interest Margin

Net interest income totaled $70.8 million during the first quarter of 2024, a decrease of $1.3 million compared to the prior quarter. Our net interest margin decreased nine basis points to 3.99% compared to the prior quarter. Results in the first quarter of 2024, compared to the prior quarter, were driven by an increase of nine basis points in the cost of interest-bearing liabilities and a decrease of two basis points in yield on earning assets.

Average loans, including loans held-for-sale, increased by $33.5 million in the first quarter of 2024, compared to the prior quarter. Loan yield decreased by three basis points to 6.48% in the first quarter of 2024, compared to the prior quarter. Loan yield was relatively unchanged as our portfolio mix has remained largely the same. Average interest-bearing deposits decreased $8.0 million in the first quarter of 2024, compared to the prior quarter. Total cost of interest-bearing deposits increased by seven basis points to 3.00% in the first quarter of 2024, compared to the prior quarter, primarily due to overall rising deposit costs as a result of the elevated interest rate environment. Average FHLB borrowings increased $36.6 million in the first quarter of 2024, compared to the prior quarter. The cost of FHLB borrowings decreased by eight basis points to 5.56% in the first quarter of 2024, compared to the prior quarter.

Asset Quality and Provision for Credit Losses

The provision for credit losses totaled $16.5 million during the first quarter of 2024, an increase of $9.9 million from $6.6 million in the prior quarter, primarily due to a $17.4 million charge-off on a specific customer in our C&I loan portfolio.

Net charge-offs during the first quarter of 2024 were $17.4 million resulting in an annualized ratio of net charge-offs to average loans of 1.11%, compared to net charge-offs of $4.7 million, or an annualized ratio of net-charge offs to average loans of 0.30% in the prior quarter. The allowance for credit losses as a percentage of total loans was 1.27% at March 31, 2024, a decrease of one basis point from the prior quarter.

The ratio of nonperforming assets to total assets was 0.80% at March 31, 2024, compared to 0.85% at December 31, 2023.

Noninterest Income

Noninterest income totaled $22.8 million during the first quarter of 2024, an increase of $5.6 million from the prior quarter. Mortgage banking income increased $4.6 million during the first quarter of 2024, primarily due to an increase in revenue related to net sale gains and fees from mortgage loan originations, including fair value changes in the held-for-sale portfolio and hedging activity, which increased $2.1 million from the prior quarter, and an improvement of $2.4 million in the change in fair value of our MSR asset, net of hedging activity, as compared to the prior quarter.

Other noninterest income increased $0.8 million during the first quarter of 2024, primarily due to an increase in income from BOLI and an increase in the fair value of customer loan swaps. Noninterest income as a percentage of total revenue² was 24.4%, an increase of 5.1% from the prior quarter.

Noninterest Expense

Noninterest expense totaled $61.8 million during the first quarter of 2024, an increase of $9.5 million from the prior quarter, primarily due to an increase in salary and employee benefits of $7.2 million as a result of higher levels of variable compensation and an increase in payroll taxes. Noninterest expense for the first quarter of 2024 included $2.5 million in merger related expenses. There were no merger related expenses in the prior quarter.

The efficiency ratio for the first quarter of 2024 was 66.05% compared to 58.58% in the prior quarter. The negative impact in the first quarter of 2024 of merger costs to the efficiency ratio was 2.66%.

Tax Rate

The effective tax rate was 19.6% in the first quarter of 2024, compared to 21.0% in the prior quarter.

Loans

Loans were $6.3 billion at March 31, 2024 and December 31, 2023, increasing $17.8 million in the first quarter of 2024, or 1.1% on an annualized basis.

Deposits

Deposits were $6.45 billion at March 31, 2024 compared to $6.37 billion at December 31, 2023, an increase of $71.3 million in the first quarter of 2024, or 4.5% on an annualized basis. Average deposits were $6.35 billion for the first quarter of 2024, compared to $6.46 billion for the prior quarter, a decrease of $103.0 million in the first quarter of 2024, or 6.4% on an annualized basis. Noninterest-bearing deposit accounts represented 23.5% of total deposits at March 31, 2024 and the loan-to-deposit ratio was 97.5% at March 31, 2024.

The ratio of total uninsured deposits to total deposits was estimated to be 32.0% at March 31, 2024, compared to 31.2% at December 31, 2023. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 25.2% at March 31, 2024, compared to 25.1% at December 31, 2023.³

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of March 31, 2024, our common equity tier 1 risk-based capital ratio was 12.54%, total risk-based capital ratio was 14.73% and tier 1 leverage ratio was 11.73%. Book value per common share was $35.15 at March 31, 2024, an increase of $0.01 from December 31, 2023. Tangible book value per common share, a non-GAAP financial measure, was $31.37 at March 31, 2024, an increase of $0.41 from December 31, 2023.

Non-GAAP Financial Measures

This press release (including the tables within the “Non-GAAP Financial Measures and Reconciliations” section) contains financial measures determined by methods other than in accordance with principles generally accepted in the United States (“GAAP”). FirstSun management uses these non-GAAP financial measures in their analysis of FirstSun’s performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. FirstSun believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. FirstSun management believes investors may find these non-GAAP financial measures useful. These non-GAAP financial measures, however, should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP measures used in this press release:

• Tangible common stockholders’ equity;
• Tangible assets;
• Tangible common stockholders’ equity to tangible assets;
• Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax;
• Tangible book value per common share;
• Net income excluding merger costs;
• Return on average total assets excluding merger costs;
• Return on average stockholders’ equity excluding merger costs;
• Efficiency ratio excluding merger related expenses;
• Diluted earnings per share excluding merger related costs; and
• Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis.

The tables beginning within the “Non-GAAP Financial Measures and Reconciliations” section provide a reconciliation of each non-GAAP financial measure contained in this press release to the most comparable GAAP equivalent.

Subsequent Event

As announced and further described in a separate press release jointly issued by FirstSun and HomeStreet today, FirstSun and HomeStreet have entered into an amendment to their merger agreement.

About FirstSun Capital Bancorp

FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank, First National 1870 and Guardian Mortgage. Sunflower Bank provides a full range of relationship-focused services to meet personal, business and wealth management financial objectives, with a branch network in five states and mortgage capabilities in 43 states. FirstSun had total consolidated assets of $7.8 billion as of March 31, 2024.

First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit ir.firstsuncb.com, SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.

____________________

¹ Total revenue is net interest income plus noninterest income.

² Total revenue is net interest income plus noninterest income.

³ Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A.

Non-GAAP Financial Measures and Reconciliations: